After a jury trial in which plaintiff Summit 6 was awarded $15 million against Samsung, Summit 6 moved for an award of future, ongoing royalties to compensate it for Samsung’s continued infringement after the verdict. Summit 6’s motion was based on the argument that the jury’s verdict only compensated it for Samsung’s past infringement up to the point of trial.

On the verdict form, the jury added the words “lump sum” under the $15 million amount. In its motion, Summit 6 argued that the jury instruction did not define “lump sum,” nor did the jury instructions explain that a lump sum award would be through the life of the patent, instead of up to the date of trial. Samsung argued in response that the jury understood that “lump sum” covered both past and future infringement, citing to specific testimony during trial defining the term “lump sum.”
The district court began its analysis of the motion by focusing the damages that a patentee is entitled to receive. “A patentee is entitled to ‘damages adequate to compensate for infringement, but in no event less than a reasonable royalty.'” Wordtech Sys. Inc. v. Integrated Networks Solutions, Inc., 609 F.3d 1308, 1319 (Fed. Cir. 2010) (quoting 35 U.S.C. § 284). In assessing a damages award, “a court must ask, ‘[H]ad the Infringer not infringed, what would [the] Patent Holder[ ] have made?'” Lucent, 580 F.3d at 1324 (alterations in original) (quoting Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 507 (1964)). “A reasonable royalty can be calculated from an established royalty, the infringer’s profit projections for infringing sales, or a hypothetical negotiation between the patentee and infringer based on the factors in Georgia-Pacific.” Wordtech, 609 F.3d at 1319 (citing Lucent, 580 F.3d at 1324). “The hypothetical negotiation ‘attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began,’ and ‘necessarily involves an element of approximation and uncertainty.'” Id. at 1319 (quoting Lucent, 580 F.3d at 1324-25).

The hypothetical negotiation can result in either a running royalty rate or a lump-sum royalty payment. See Lucent, 580 F.3d at 1325. “District courts have broad discretion to interpret an ambiguous verdict form, because district courts witness and participate directly in the jury trial process.” Telcordia Techs., Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1378 (Fed. Cir. 2010).

As explained by the district court, “[i]n this case, the verdict form under Damages asked: ‘What sum of money, if any, do you find from a preponderance of the evidence is adequate to compensate Plaintiff for Defendant’s conduct that you found to infringe? Provide the amount, if any, in dollars and cents.’ See Jury Charge 46-47, ECF No. 562. On the line below this question, the foreman wrote ‘15,000,000.00 -> $15 MILLION’ and underneath the blank line added ‘LUMP SUM.’ Id. The Court finds that this is an express statement in the verdict that this is award is for a lump sum license. See Telecordia Techs., 612 F.3d at 1378 (‘In the absence of an express statement in the verdict, this court cannot determine whether the jury compensated [plaintiff] for all of [defendant’s] infringing activities.’).”

The district court then noted that “[t]hroughout trial, ‘lump sum’ was consistently explained by both parties as providing a one-time, single payment for a license for the life of the patent. Summit 6’s expert, Benoit, and Samsung’s expert, Martinez, both testified multiple times as to this definition. Summit 6 argues that the jury charge never gave the jury a specific definition of ‘lump sum’ and thus it is unclear what the jury intended by its inclusion of that term on the verdict form. Pl.’s Mot. Compulsory Royalty 2, ECF No. 569. The Court, however, finds that the trial testimony was consistent and abundant such that the jury would understand that ‘lump sum’ would compensate Summit 6 for the life of the patent. Also, the fact that the jury specifically wrote that language underneath the $15 million amount emphasizes that the jury wanted to ensure their damages amount was clear.”

As a result, the district court concluded that the jury verdict encompassed damages for both and future infringement. “Accordingly, the Court finds that the jury verdict represents the amount of a lump sum license for the life of the patent and compensates Summit 6 for both past and future infringement of the ‘482 patent.”

Stan Gibson, an experienced technology and IP trial lawyer, represents inventors, manufacturers, owners and others in litigation centering on complicated technology. Stan's practice is national in scope and he represents both plaintiffs and defendants and has litigated dozens of cases on behalf of his clients, taking many of them to trial. Although most cases settle, Stan's ability to take cases to trial enhances their value and drives favorable verdicts and settlements. Contact him at 310.201.3548 or SGibson@jmbm.com.

Greg Cordrey, an experienced patent litigator and former flight test engineer, represents a wide range of industries including medical device, computer, e-commerce, semiconductor, automotive, aircraft, and consumer products. He has litigated patent cases nationwide and has practiced before the Federal Circuit and the U.S. Patent and Trademark office as a registered patent attorney with experience in concurrent litigation and patent reexamination proceedings. Greg is recognized as one of the "Best Lawyers in America" in IP Law, as well as a "Super Lawyer" and "Rising Star." Contact him at 949.623.7236 or GCordrey@jmbm.com.

Rod Berman is recognized by the Daily Journal as one of the top 30 intellectual property attorneys in the State of California, and by the Los Angeles Business Journal as one of the top 100 attorneys in Los Angeles. Rod's practice focuses on patent, trademark, copyright, unfair competition and internet responsibilities and includes counseling, litigation, opinions, licensing and prosecution. In addition to being a registered patent attorney, Rod is a court-recognized expert in patent and trademark law, and has successfully argued before the Federal Circuit. Contact Rod at 310.201.3517 or RBerman@jmbm.com.

Andrew Shadoff, is a litigation associate who has assisted in prosecuting and defending patent infringement lawsuits involving mechanical devices. He has drafted successful summary judgment motions and pretrial motions in limine, and has assisted with trial and witness preparation. Contact him at 310.712.6856 or AShadoff@jmbm.com.

Joe Mellema's practice focuses on litigation in federal and state courts, including the protection and enforcement of intellectual property rights, and business and commercial disputes. He has handled patent, trademark, copyright, trade secret, unfair business practices, antitrust, and business and commercial lawsuits in all phases of litigation and arbitration. In addition to a law degree, he has dual degrees in electrical engineering and physical sciences, and was formerly a systems engineer at Raytheon Company. Contact him at 949.623.7232 or at JMellema@jmbm.com.

Rachel Capoccia

Rachel Capoccia focuses on technology-based litigation and counseling, with an emphasis on patent litigation, copyright litigation and other technology-related matters. Her legal experience is complemented by 10 years working at IBM as a software engineer before law school, during which she led a team of engineers who developed computer graphics software and computer aided design systems. She represents clients in all phases of patent infringement matters involving diverse areas of technology. Contact Rachel at 310.201.3521 or RCapoccia@jmbm.com.

Jessica Newman is a litigation associate, and a member of JMBM's Patent Litigation Group. She is involved in all aspects of litigation and has assisted in representing clients in a variety of industries with regards to patent infringement and copyright infringement issues. Contact her at 310.785.5372 or JNewman@jmbm.com.